dropped The price of oil in Friday’s trading With China imposing new closures to combat “Covid-19”, and US consumer prices rising more than expected.
Brent crude fell $1.06 to $122.01 a barrel upon settlement. US West Texas Intermediate crude also fell 84 cents to $120.67 a barrel.
The two benchmarks recorded weekly gains of 1.9% for Brent and 1.5% for US crude.
Prices came under pressure following the US Department of Labor’s Consumer Price Index report.
Consumer prices in the United States accelerated in May, as gasoline prices hit a record and the cost of services rose further, indicating that the Federal Reserve may continue to raise interest rates to combat inflation.
Peak summer fuel demand in the United States pushed gasoline to nearly $5 a gallon.
Parts of Shanghai imposed new restrictions to combat “Covid-19”, and the Chinese city announced a round of mass screenings of millions of residents.
China’s crude oil imports on May 12 were almost higher than a year earlier.
“This does not indicate that oil demand is rising. It is more likely that China has acted opportunistically, buying crude oil from Russia at a price well below the global market level in order to replenish its stocks,” said Commerzbank analyst Carsten Fritsch.
Oil prices had received support earlier from fears of possible disruptions in supplies in Europe and Africa.
Two oil engineers in the Sarir oil field in Libya said yesterday, Friday, that the field’s production decreased following the closure of the Ras Lanuf and Es Sider ports and with a threat from one of the groups to close the Hariga port.
Regarding US supplies, the number of oil rigs operating in the United States, an indicator of future supplies, rose by 6 to 580 rigs this week, the highest level since March 2020.
It also seemed that the prospects of reaching a nuclear agreement with Iran and lifting US sanctions imposed on its oil sector were declining, which supported the increase in oil prices.
And last Thursday, the Director-General of the International Atomic Energy Agency, Rafael Grossi, said that Iran dealt an almost fatal blow to the chances of reviving the 2015 nuclear agreement following it began removing all monitoring equipment installed by the agency under the agreement.
